Nikolas Sargeant
The TRON DAO Reserve has quietly removed approximately 12,000 Bitcoin, worth about $726 million, from the collateral backing its USDD stablecoin. This significant shift has left USDD primarily supported by TRX, the native token of the Tron blockchain, raising eyebrows within the crypto community. The change was first spotted on social media platform X, with no official announcement from the TRON DAO.
Sun Defends Collateral Shift and Hints at Future Upgrades
Tron founder Justin Sun took to X to address the situation, describing the operation as "not mysterious." Sun emphasized that collateral holders have the autonomy to withdraw funds without seeking approval, drawing parallels between USDD's mechanism and that of MakerDAO.
Sun also noted that USDD, currently boasting a "long-term collateralization rate" exceeding 300%, lacks capital efficiency. He teased potential upgrades to the stablecoin, aiming to boost its competitiveness in the decentralized finance (DeFi) landscape.
However, Sun's statements left questions unanswered regarding the TRON DAO's role in the decision to remove Bitcoin from the collateral. Initially launched as an algorithmic stablecoin akin to Terra's UST, USDD later evolved into a hybrid model backed by various assets, including Bitcoin, TRX, USDT, and USDC.
Despite recent changes, USDD maintains its dollar peg with a market cap of roughly $744 million, placing it just within the top 100 cryptocurrencies. TRX, now the primary backing for USDD, has experienced increased volatility but remains a top 10 cryptocurrency when excluding stablecoins.
TRX currently trades at $0.15, having more than doubled in value over the past year, partly due to its role in the burgeoning memecoin market. The Tron ecosystem has also seen significant growth, recently surpassing Solana to become the second-largest blockchain by total value locked (TVL), with $8.2 billion across over 30 DeFi protocols, according to DeFi Llama.
SunPump Eclipses Solana's Pump.fun in Memecoin Arena
Tron's newly launched meme coin launchpad, SunPump, has quickly captured the imagination of speculative traders, overshadowing the once-dominant Solana-based platform, Pump.fun.
Pump.fun had been a powerhouse in the meme coin space throughout the year, facilitating the launch of successful tokens like Billy and Michi. At its zenith, Pump.fun saw over 20,000 tokens launched daily, generating more than $2 million in revenue. However, SunPump's recent debut has disrupted this dominance.
SunPump has rapidly gained traction, with tokens like Sundog (SUNDOG) on Tron reaching a market cap of $190 million, far surpassing Pump.fun's top token, Michi (MICHI), which stands at $61 million.
Amidst these developments, the Tron Foundation and Sun face ongoing legal challenges in the US. Last year, the SEC filed a lawsuit against Sun and the Tron Foundation, alleging unregistered securities offerings, manipulative trading practices, and illegal promotion of crypto assets, specifically targeting Tron (TRX) and BitTorrent (BTT) tokens.
